Energy Management System Market is expected to reach US$ 105.2 Billion by 2031

Increasing Government Initiatives for Effective Energy Utilization in Growing Data Center Industry Boosts Energy Management System Market Growth  

According to our latest market study on "Energy Management System Market Size and Forecast (2021–2031), Global and Regional Share, Trend, and Growth Opportunity Analysis — by Component, System Type and End-Use Industry," the market was valued at US$ 49.5 billion in 2024 and is anticipated to reach US$ 105.2 billion by 2031; it is estimated to record a CAGR of 11.4% from 2024 to 2031. The report includes growth prospects in light of current Energy Management System Market trends and driving factors influencing market growth.

Government agencies and technology companies are increasingly reliant on data centers for a wide range of purposes, from hosting infrastructure to supporting data-driven services. Microsoft maintains dozens of data centers globally and has invested over US$ 15 billion to provide cloud computing in 140 countries. Although high-performance and cloud computing enable technological advancements, the costs of running data centers are skyrocketing. According to the United States Chamber of Commerce, a typical data center spends 40% (an average of US$ 7.4 million) of its annual operating budget on powering its systems. Data centers consume ~3% of all electricity globally, with US data centers accounting for nearly 2% of the country's electricity consumption. As per the insights on data center energy use from the Department of Energy, data centers consumed about 4% of the total electricity in 2023 and are anticipated to consume about 6 to 12% by 2028. Governments worldwide are promoting energy efficiency in data centers through directives aimed at reducing energy consumption. For example, the US Department of Energy's Federal Energy Management Program (FEMP) encourages organizations to enhance data center efficiency per the Office of Management and Budget's Smart Cloud Strategy and M-16-19 Memorandum. Other key energy efficiency directives include European Commission Directive 2023/1791, other US energy efficiency Programs, and Chinese power usage regulations. Such government initiatives toward minimizing energy consumption from data centers across the globe fuel the Energy Management System Market growth.

Energy Management System Market Analysis – by Geography, 2024

Source: The Insight Partners Analysis

Since over 70% of greenhouse gas emissions come from the energy sector, an EMS is an effective tool in the fight against CO2 emissions as per the EIA. An energy management system enables companies to minimize energy consumption during peak periods and thus reduce dependence on fossil fuels for power generation. The load optimization process ensures a device operates at peak efficiency, preventing energy wastage and lowering emissions. An EMS facilitates the seamless integration of renewable power sources, including solar and wind, into the power grid. By prioritizing renewable energy when available, EMS minimizes reliance on fossil fuels, which are the primary contributors to carbon emissions. Efficiency is an important measure for reducing energy demand in the Net Zero Emissions by the 2050 scenario and has made progress in recent years. However, to achieve this target, the rate of improvement in global energy intensity must be higher than in the past.

To maintain energy efficiency, manufacturers must monitor their energy consumption to learn how and where energy is consumed. By installing high precision submeters, system operators can monitor energy used in various areas of production processes in different industries. By monitoring energy usage, the operator can be alerted to problems such as machine failures through unusual energy consumption. Energy management systems also identify which areas may be wasting energy and take steps to reduce its usage—improving HVAC systems, installing automatic lighting, and converting usage when possible off-peak times. By using submeters for power factor (PF) monitoring, operators can proactively respond to indications of reduced efficiency.

The scope of the Energy Management System Market report focuses on North America (US, Canada, and Mexico), Europe (UK, Germany, France, Italy, Russia, and Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and Rest of Asia Pacific), Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and Rest of South & Central America). In North America, the US held the largest Energy Management System Market share in 2024. As a result of the increasing adoption of energy management systems (EMS) to improve energy efficiency, the Energy Management System Market in the US is anticipated to witness significant growth in the coming years.

As per the National Institute of Standards and Technology, the manufacturing sector contributed nearly US$ 2.3 trillion, accounting for more than 11.4% of the total US GDP in 2023. The country recorded the world's second-largest manufacturing and industrial production levels after China. Consistently increasing industrial output requires continuous investments in infrastructure development, adoption of new manufacturing tools and techniques, and expansion of production spaces. The growing manufacturing sector creates a demand for electricity in manufacturing operations, fueling the adoption of energy management solutions. The US economy depends on a broad infrastructure network to maintain its position in the global economy. The declining infrastructure in sectors such as oil & gas, energy, heavy machinery, automotive, and aviation in the nation signifies the need for capacity expansion and upgrades.

This decline propels investments in infrastructure upgrades, resulting in the need for electricity in manufacturing operations and driving the demand for energy management systems. The growing focus on airport infrastructure and the rising number of airports are boosting construction activities in the US. In 2023, the US Federal Aviation Administration announced funding of US$ 1 billion through the Bipartisan Infrastructure Law to improve 99 airports' infrastructure. In December 2023, the Biden-Harris administration announced a US$ 8.2 billion investment for 10 key passenger rail projects in the country, aiming to construct and repair railway infrastructure. The rising investment toward public infrastructure development in the country is anticipated to fuel the demand for electricity, which is projected to boost the growth of the Energy Management System Market. 

The Energy Management System Market in Asia Pacific is segmented into Australia, South Korea, India, China, Japan, and the Rest of Asia Pacific. Developing economies such as India, China, Thailand, Vietnam, Singapore, Taiwan, and New Zealand are experiencing a gradual increase in the adoption of advanced manufacturing technologies. The growing automation and digitalization in manufacturing operations are propelling the growth of the modernized and standardized manufacturing sector in Asia Pacific, which is expected to fuel the demand for energy or electricity optimization during the forecast period. The rising vehicle production in the region is also expected to boost the demand for energy management systems in the coming years. Countries such as China, India, Australia, Japan, and South Korea, on average, witnessed a 13% increase in all types of vehicle production from 2022 to 2023, as per the insights from OICA; this production growth is anticipated to boost the demand for electricity, propelling the need for energy management systems in optimizing energy consumption.

ABB; Schneider Electric SE; General Electric Company; Honeywell International Inc.; Siemens AG; IBM Corporation; Johnson Controls, Inc.; Emerson Electric Co.; Eaton Corporation; and Mitsubishi Electric Corporation are among the key players profiled in the Energy Management System Market report. Several other major players were also studied and analyzed in the market report to get a holistic view of the market and its ecosystem. The market analysis provides detailed market insights, which help the key players strategize their growth.    

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